Brexit: What we learnt last week

A round up of last week's biggest Brexit news.

Interest rates cut

The Bank of England (BOE) cut interest rates from 0.5% to 0.25% in an effort to increase spending in the UK last week. Governor of the BOE Mark Carney said after the announcement of the cut that there is scope to drop the rates further.

This is the first time the BOE has cut interest rates since 2009. Mr Carney said that the decision to leave the EU marked a "regime change" in which the UK would "redefine its openness to the movements of goods, services, people and capital". There has been talk that cutting closer to zero could lead to negative interest rates, with the banks charging customers to hold their money. This has not been confirmed.

Brexit tax: State aid rules

EU state aid rules are designed to protect free competition within the single market. In the event of the UK separating from the EU, state aid rules may still apply to the UK, writes Donald Drysdale.

After Brexit, the UK will probably still be subject to the state aid rules if it enters into an agreement that gives continuing access to the EU single market. However, until the results of the Brexit negotiations are finalised this is not guaranteed.

European elections and the UK

Results of a YouGov poll last week have shown that many EU citizens feel that the UK should only retain membership in the free market if it continues to observer the free movement of people from the EU across its border.

In Germany and France, the respective percentages were 47% and 44%. Perhaps unsurprisingly, 42% of the UK population polled said that the UK should get a deal on free trade without maintaining free movement. With negotiators on both side trying to fulfill the wants of their county’s citizens, and to secure the best possible deal, the talks are likely to be somewhat raucous.

Does the UK owe the EU £21bn?

A report in the German magazine Wirtschafswoche claims that the UK owes the EU £21.2bn in unpaid debts. The report quotes an un-named source saying that until the debt is settled, any potential Brexit deals will be blocked.

Although the figure is yet to be confirmed by the European Commission or the UK government, it is likely that the UK will have to honour “outstanding commitments” to the EU budget before a Brexit deal is finalised.